European blood plasma giant Grifols will buy Talecris Biotherapeutics, a major US-based biopharmaceutical company, for $3.4 billion. Bloomberg Businessweek has the story:
The deal gives (Spain-based) Grifols almost a third of the U.S. market for blood-based infusions, matching Baxter International Inc. and beating CSL Ltd.’s 29 percent share, said Andrew Goodsall, a health-care analyst with UBS AG in Sydney. CSL, based in Melbourne, ended its proposed $3.1 billion acquisition of Talecris a year ago following an objection by the U.S. Federal Trade Commission.
Talecris was created in 2005 when Bayer AG sold its plasma business for about $590 million to New York-based Cerberus and Ampersand Ventures of Wellesley, Massachusetts. Plasma is the watery, yellow liquid that carries blood cells. Grifols, Talecris, Baxter and CSL pay healthy people to donate plasma at collection centers across the U.S., then spin it in a centrifuge to extract products such as immunoglobulins, albumin and blood-clotting proteins for treating hemophilia.
“The FTC is likely to be skeptical of this deal and view the proposed deal as something that may increase industry pricing power and reduces competition,” (analysts) wrote. “To the extent the combined entities decide to cut back on expansion plans, it would result in less competition.”
Talecris plans to spend as much as $800 million over the next five years to increase capacity by 43 percent, Chief Financial Officer John Hanson said May 13.
The Wall St. Journal adds:
In a Spanish regulatory filing, Grifols said its annual sales will rise to $2.8 billion following the purchase, 58% of which will come from North America and 28% from Europe.
Apart from representing a bright spot in a private-equity industry beset by soured economies and reduced access to bank lending as a result of the financial crisis, the deal shows that even in southern Europe, market turmoil hasn’t completely killed off merger activity. Even though it is barely bigger than Talecris as measured by market value, Grifols was able to cobble together the cash needed for the deal from a group of banks, a person familiar with the matter said.